The Cost Savings of Owning vs Renting in Carmel CA

Jul 17

Hello from Bri Steel, Broker/Realtor® & Owner of Bixby Realty!

There is nothing quite like a home you can truly call your own. A place where you have the gleaming hardwood floors you have always dreamed of, a place where you can maintain your own vine-lined patio, a good neighborhood for your kids to grow up in, and a freedom from the whims of your landlord. These are the images that immediately come to mind for many of us.

Yet some of the biggest advantages of owning a home are less romantic and more practical – in fact, there are financial advantages to owning a home:

Above: A before and after of Bri Steel’s classic California bungalow.

Tax Deductibility - You can deduct the cost of interest on your mortgage loan from your state and federal income taxes. Since interest usually makes up the bulk of your payments during the first half of your mortgage, the savings can be substantial. Some of your costs at closing (including prepaid mortgage interest) may be deductible on your income tax return for that year, and prepaid points at closing represent additional mortgage interest and may be deducted.

Property Tax Deductibility - You may deduct any property taxes you pay.

Appreciation Potential - Real estate is considered a strong long-term investment because it generally appreciates in value. The impact of loan-to-value potential can increase as the value of the home increases.

Capital Gains Exclusion - When it comes time to sell your home, the amount of capital gains you must pay is reduced. A homeowner can exclude up to $500,000 per couple if married and filing jointly, or $250,000 if single or filing separately, for homes that have been the taxpayer's primary residence for the past two years.

Capital Gain Treatment - Congress allows preferential tax treatment of gains on capital assets held for more than one year. This would be important for a homeowner whose gains exceed the allowable exclusion.

Principal Accumulation - Mortgages are designed to pay interest for the time the money has been used and to pay off the principal debt over a period of time. This payment schedule means that a portion of the monthly payment is used to pay off the principal debt.

Personal Pleasure - Pride of ownership is a valid reason for wanting to own a home. You can customize your home while enjoying the financial benefits.

Consult your financial advisor for the best assessment of your financial situation. He or she is best qualified to discuss the financial implications of buying a home and help you create a plan to achieve your homeownership goals.

At Bixby Realty we bring a fresh and innovative “boutique” approach to real estate on the Monterey Peninsula. In the process, we make dreams come true.

Looking to sell? We will make your home SHINE. Listings like ours that are beautifully presented and professionally inspected sell faster and for more money.

Looking to buy? We help our clients write offers that WIN. We are competitors at heart and negotiators at work. We get results.

Call or email us to set up an appointment with our broker and owner, Bri Steel.

Bri Steel
Broker/Realtor® + Owner
Bixby Realty
831.200.6338
bri@bixbyrealty.com